Here's Why Delaware Judge Annulled Elon Musk's $56 Billion Pay Package

Elon Musk is a renowned billionaire and genius who enraptured the world with numerous scientific innovations. His many companies including SpaceX and Tesla have revolutionized the quality of life. Furthermore, his many contributions to different educational programs have played a key role in their enhancement. Recently, Musk encountered some legal scrutiny inflicted upon Tesla’s investors. They reportedly sued the billionaire to “challenge” his $56 Billion pay package as per a court filing. It seems like a verdict has finally been made and the outcome might not be the greatest thing ever for Musk.

Fox News Business reports revealing that Delaware Judge Chancellor Kathaleen St. Jude McCormick has ruled against Musk’s aforementioned pay package. The court filing echoed the Judge’s thoughts and explained her lawful reasoning on the matter. It read, “The decision dares to ‘boldly go where no man has gone before,’ or at least where no Delaware court has tread.” It continued, “The collection of features characterizing Musk’s relationship with Tesla and its directors give him enormous influence over Tesla.” Additionally, Judge McCormick also entitled Musk to “rescission” should he desire to explore that path. 

Moreover, she also strictly ordered both Musk and the brood of Tesla investors to cooperate on a final offer to implement her rulings. The letter must contain an amicable way forward, underlying issues, and remuneration. Judge McCormick also stated that if he wanted Musk could also file for an appeal at the Delaware Supreme Court. Whether or not he’d consider that part or not remains a mystery and can only be uncovered in the future. But that’s not all that the judge added. She went on to clarify her decision about the case and made sound yet noteworthy points. 

Judge McCormick ruled that Tesla was “unable to prove that the stockholder vote was fully informed because the proxy statement inaccurately described key directors as independent and misleadingly omitted details about the process.” This insinuates that it was a mammoth task for both Musk’s employees and his lawyers to hold onto.

Nevertheless, she noted the aftermath saying it facilitated the company “with the unenviable task of proving the fairness of the largest potential compensation plan in the history of public markets.” Judge McCormick labeled the entire ordeal as a “tall order” concluding her reasoning. Musk’s next moves for his company are highly anticipated. Again, would he appeal to higher authorities or will he go with the flow? 

Nonetheless, Musk’s agreement with Tesla should he have not been sued was the largest compensation package ever! The fact that he was able to agree to such a staggering amount speaks volumes of the wealth he’s amassed. Moreover, if all had gone well, he’d have been able to purchase stock without a hitch, as a bonus he’d be purchasing them at a highly discounted price.